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Southeast Asia 2035: A Realized Economic Promise? Report Released


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Will the countries of Southeast Asia remain stuck in the “middle-income trap”? Or will they realize their economic promise by 2035? In the report released today, Wikistrat shows what it would take for the region to get there in twenty years’ time — and what futures await it if fails.

SEA2035 report cover

Southeast Asia’s growth outperformed other regions during the Global Financial Crisis of 2008-2009 and recent projections point to continued strong growth. As production costs are increasing in China, multinational firms look to Southeast Asia for its lower cost of production, its growing middle class and its rising education levels.

Yet some dark clouds can be seen gathering on the horizon. As income levels rise, so do wages, thereby undercutting Southeast Asia’s low-cost advantage. Squeezed in between other low-wage economies and advanced high-income ones, the region could stagnate unless it pushes its way to high-income status with innovation, advanced technology and high-skilled labor. In other words, the question is will Southeast Asia overcome what the World Bank calls the “middle-income trap” that sees many other developing countries failing to rise to the next level?

There are challenges beyond the economic. These range from major trade agreements such as the Trans-Pacific Partnership, promoted by the United States, China’s Regional Comprehensive Economic Partnership, vast potential of oil and gas resources within or outside disputed waters in the South China Sea, the American “pivot” to Asia, China and Japan’s rising nationalism, global geopolitical rivalry, water scarcity and climate change.

This summer, Wikistrat conducted an online, crowdsourced simulation in which its analysts were asked to identify which of these factors, or combinations of factors, will contribute to Southeast Asia’s economic success over the next twenty years. In the report released today, Wikistrat Senior Analyst Andrew K.P. Leung summarizes the findings of 50 competing scenarios in four “Master Narratives” that each describe a possible future for the region

Click here or on the cover image to download the full PDF report.

For more information about Wikistrat and for access to the full simulation archive, contact info@wikistrat.com.

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Turkey and Qatar: Deal-Makers or Deal-Breakers?


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Today, Wikistrat’s analysts begin exploring the ways in which Qatar and Turkey can use their positions in the Middle East to influence each other, the region and regional radical Islamist groups in a two-week crowdsourced strategic simulation.

John Kerry

State Department Photo

Turkey and Qatar are pivotal “swing states” within the broader Middle East. Each possesses firmly rooted ties with the broader West. Qatar has transformed its tremendous resources into a sustainable economic vehicle by acquiring a large stake in developed businesses. Cooperation also extends to defense and security issues with Doha emerging as a leading purchaser of American-made military equipment in recent years. Similarly, Turkey has long sought greater economic integration with the West. Despite not securing admission, the EU has become Turkey’s biggest import and export market. Turkey, also, remains a full member of NATO, cooperating on terrorism and Syria.

At the same time, both countries have maintained foreign and internal policies that set them apart, not only from the West, but also their regional neighbors. Though Qatar has adopted liberalizing reforms — 2004 saw the passage of a constitution that recognized women’s suffrage — it remains a conservative country, using its Al-Jazeera media outlet to promote a distinctly Islamic identity. Likewise, Doha sought an organizing role in the chaos that emerged following the Arab Awakening, providing extensive support to Islamist groups in both Libya and Syria. Turkey, on the other hand, has impeded efforts to isolate Iran, maintaining high amounts of trade in the face of international sanctions. Moreover, its response to the regional turmoil wrought by the Arab uprisings — which included the provision of political support to the Morsi regime in Egypt — led to a rupture in ties with Saudi Arabia and other Gulf states.

Both countries now stand at a crossroads. In 2013 Sheikh Hamad abdicated his monarchy to his 35 year old son, Sheikh Tamim, leaving it to him to guide Qatar in the decades ahead. Meanwhile, Turkey’s evolution will be presided over by increasingly autocratic, state structures, following constitutional changes that enabled the AKP domination. The path each adopts will have significant ramifications for the region, especially the future of radical Islam. Qatar’s support for religious based groups, and Turkey’s faith in the notion of “Islamic democracy” hold promise to groups seeking a broader role for religion in politics. At the same time, Qatar and Turkey’s high level of co-operation with the West are likely to see them come under pressure to do more to stem the advance of groups — embodied by ISIS — that mobilize religion as a motivator for violence.

WS AnalystsAre you interested in participating in simulations like these? Apply for membership to the analytic community here.

Stay tuned to Wikistrat’s Facebook and Twitter channels for updates and insights from this simulation!

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Ebola: A Global Health Challenge Report Released


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As the Ebola virus reaches Europe and North America, Wikistrat looks at the challenge posed by the epidemic to health policy globally. A report proposing four future pathways for the disease, and how the global public health system manages it, is released today.

EGHC report cover

Since a major outbreak of the Ebola virus disease was first reported in Guinea in March 2014, an epidemic has spread across West Africa. Already, this is the worst Ebola outbreak in recorded history. The disease is no longer contained to the region: a Saudi Arabian man traveling home from Sierra Leone is believed to have died of Ebola in early August and several Americans are treated for the disease in the United States. There is no known cure, although one American doctor diagnosed with the virus was found Ebola-free after taking experimental drugs in August.

While there is widespread concern about the spread of the disease, there are arguments against Ebola becoming a pandemic. The virus is not airborne and cannot survive outside the body for long. Symptoms become apparent quickly and patients typically die before infecting more than one or two others.

These realities have done little to quell the panic. Saudi Arabia has stopped issuing visas to Muslim pilgrims from West Africa. British Airways has suspended all flights to and from both Liberia and Sierra Leone. Western governments have advised their citizens to avoid the region. However, civil unrest, the absence of adequate medical services and low trust in both authority and foreign aid workers might pose the biggest risk.

From August to September 2014, Wikistrat conducted a crowdsourced simulation during which experts examined the challenge posed by the West African Ebola outbreak to health policy globally. Analysts proposed both positive and negative outcomes within comprehensive, competing scenario pathways of the epidemic’s spread and termination.

In the report released today, Wikistrat Senior Analyst Prof. Randy Cheek synthesizes the dozens of scenarios that were proposed during the simulation and offers key strategic takeaways for companies and governments that could be affected by the epidemic.

Click here or on the cover image to download the full PDF report.

For more information about Wikistrat and for access to the full simulation archive, contact info@wikistrat.com.

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Ask a Senior Analyst — Carl Wege


Wikistrat’s Facebook and Twitter followers recently engaged in a 24-hour exclusive Q&A session with one of Wikistrat’s Senior Analysts, Carl Wege. Questions and Prof. Wege’s answers are transcribed below.

Carl Wege

Carl Wege is a Professor of Political Science at the College of Coastal Georgia. He has traveled in Asia, Latin America, Africa and Israel and published a variety of articles discussing terrorism and security relationships involving Hezbollah, Syria and Iran.

Etah Ewane: Historically, relations between Iran and Arab countries have been hostile and Syria has always been used as a tool through which Teheran has supplied weapons to various Islamist groups. To what extent would the collapse of the Assad regime in Syria affect Iran’s geostrategic influence in the region?

Answer: The collapse of the Assad regime would be devastating to everything Iran has accrued in regional influence since the 1979 revolution. The Syrian state has been shattered and Bashar Assad is now little more than the local face of an Iranian occupation that has shed rivers of Sunni blood in his attempt to maintain power. Therefore any successor Sunni government would be hostile to Iran.

Since the Islamic State has now spit Iraq in two, Iran’s Resistance Axis (Jabhat al-Muqawama) has been shattered from the Levant to the Persian Gulf. The collapse of the Assad government has effectively left a Russian-supported and Iranian-dependent canton of internally-displaced minorities including most Alawite, Christians and some clans of neutralist Druze encompassing the space in western Syria. Essentially Iran, primarily through the Quds Force of the Revolutionary Guard, is managing a constellation of militias ranging from Alawite Jaysh al-Sha’bi and Ba’ath Battalions to Lebanon’s Hezbollah, and Iraqi Kata’ib Hezbollah and Asa’ib al-Haq militias.

In the end, though, it is likely that the militias defending this western Syrian rump state will essentially control a series of cantons united primarily by allegiance to Iran’s Revolutionary Guard through the figure head of Bashar Assad. “Saving Syria” therefore is second only to the acquisition of nuclear weapons in Tehran’s hierarchy of needs. (more…)

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Top Four Possible Global Impacts of the Ebola Outbreak


Wikistrat recently concluded a crowdsourced strategic simulation to study the implications of the Ebola virus outbreak. The infographic released today shows the top four possible global impacts of the disease, from Africa to China to Europe to the United States.

EGHC infographic

Click here or on the image above to see the full version.

For more information about Wikistrat and for access to the full simulation archive, contact info@wikistrat.com.

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Ask a Senior Analyst — Christine MacNulty


Wikistrat’s Facebook and Twitter followers recently engaged in a 24-hour exclusive Q&A session with one of Wikistrat’s Senior Analysts, Christine MacNulty. Questions and Ms. MacNulty’s answers are transcribed below.

Christine MacNulty

Christine MacNulty, CEO of Applied Futures, Inc., has forty years’ experience as a consultant in long-term strategic planning for concepts as well as organizations. She has also specialized in understanding cultural change. For the last twenty years, most of her consultancy has been conducted for the Department of Defense and NATO. She has also worked with many Fortune Global 500 companies.

She is the co-author of Strategy with Passion: A Leader’s Guide to Exploiting the Future, to be released in November 2014.

Christine MacNulty: Since both questions relate to Values, some background is required:

Values are emotional constructs that underpin attitudes and behavior. They are closely related to beliefs, which are convictions that are held to be true by individuals or groups and they are also related to psychological needs. They are longer term and they change only slowly. Beliefs are long-held perceptions that have generally been inculcated from birth by family, teachers and leaders of the society, although they can and do change slowly over time. In some cases they may change quickly, generally through some extreme (good or bad) event. Motivations are the factors that compel a person or group to act and they are functions of values, beliefs and needs. Understanding motivations helps us understand why people do as they do. Behavior tells us the what people are doing. If we understand the why, we have a greater chance to anticipate what people are likely to do next.

The values models we use are based on Maslow’s hierarchy of needs, and augmented by the work of Shalom Schwartz, Geert Hofstede, Ron Inglehart and others.

Monica J. Jerbi: A number of peer-reviewed studies analyzing the cultural theories of Hofstede (1984), Triandis (1995) and Schwartz (1994) show how macro-social and macro-economic variables impact and actually change culture over time, particularly in regards to individualism/collectivism, power distance and autonomy/conservation. These values also shape a country’s ability to transition to a functioning pluralistic democracy, rate of economic development, the likelihood of extreme corruption derailing democracy, etc.

Considering war disrupts macro-social and macro-economic variables, how does this make framing behavioral/strategic communications messages to alter behaviors and attitudes (particularly aimed at potential insurgents and terrorists) harder and what can be done to overcome these additional obstacles?

Answer: First, from my own perspective, I think that assigning a direction of causality to such factors as macro-economic variables is difficult, especially with respect to values. Factors such as access to education and communication may increase the numbers of people with certain values more rapidly than they would otherwise, but it’s a change in values in the first place that creates and increases the demand for the education and communication. And the question itself states that values shape such elements as democracy, economic development, etc. And I agree with that.

However, moving on to the second part of the question: At a very broad-brush level, war generally occurs because one leader/group with one set of values wants to vanquish another for reasons of land, resources, historical argument, religion or ideology. The instigators of the conflict are unlikely to be dissuaded by any communication short of believable threat of annihilation. The people who may be dissuaded are the followers or those who support the fighters in some way.

Understanding values offers one of the greatest benefits to effective influence and communication campaigns. Because they operate at a deep emotional level, messages that appeal to values are far more influential (for good or ill) than messages that address attitudes or behavior — they resonate more deeply and they are more memorable. If we want to influence behavior, of nations, groups or even the behavior in the marketplace, then the closer we can come to appealing to values, the more likely we are to be effective in our efforts.

However, there is an important element here: people are very reluctant (absent force) to act in opposition to their values — especially when they are tied to ideology, religion or honor. The West has sometimes failed to take cognizance of this, and thus campaigns have failed. Understanding values thoroughly enables the crafting of more effective campaigns.

Many strategic communications campaigns, information operations and psychological operations have addressed behavior. Clearly, we would like to prevent people from joining ISIS, for instance, just as we would like to stop people from planting IEDs, but unless we can understand people’s motivations for those actions, that is not likely to happen. And then, once we know their motivations for such behavior in the first place, we need to understand how we, in the West, can motivate them to do differently. And we may not be able to. It may take access to better education, jobs, changes of governments and other action within their own countries.

Having read interviews with former foreign fighters, especially second-generation Middle Eastern and Asian immigrants from the United Kingdom and the United States, it seems that some have felt like second class citizens within those countries, unable to make their way in society, the educational system and employment. Shame and guilt, values inculcated in their parents’ countries, are powerful motivators. They seem to need the validation of honor earned in battle to gain a measure of self-worth. Do we know enough to know how to overcome motivations of this sort?

Finally, what can we do to improve strategic communications? The first thing is to think strategically. Think about Nth order effects. If we have a vision and strategy with respect to a particular country or terrorist group, for instance, then responses to events can be crafted in the context of that trajectory, and can be aligned with the overall strategy. If we have no strategy, then no amount of reactionary crisis communications can make up for that lack of strategy. (more…)

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When Scotland Leaves the UK: Report Released


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On September 18, Scotland will vote in a landmark referendum on whether to secede from the United Kingdom. The vote on independence will determine the shape of the country’s political environment for years to come.

WSLUK Report cover

Earlier this year, Wikistrat ran a three-week long crowdsourced simulation to map the opportunities available to an independent Scotland, risks it might face and the likely trajectories it could take as a new state.

The pro-independence Scottish National Party envisions an independent Scotland as one of Europe’s wealthiest countries, with an economy based on a highly educated population, large North Sea oil reserves and the development of a renewable energy export industry. It would also put a robust social welfare system at the heart of Scotland’s political system.

Critics contend that Scotland would face financial, economic and security risks that could strangle the new state. Scotland would also face challenges when it comes to redefining its political and economic relationships with the rest of the United Kingdom, the European Union and NATO. Fundamental issues such as currency, trade relations, economic unions and collective security would have to be worked out during the two years between the referendum and formal independence — which is no small task.

Considering these risks and opportunities, Wikistrat evaluated four master scenarios for charting Scotland’s emergence as an independent country by the year 2020, assuming it secedes from the United Kingdom within the next five years. These “Master Narratives,” outlined in the simulation’s report by Wikistrat Senior Analyst Jeffrey Itell, show that independence offers only modest rewards and many risks, including the chance that Scotland’s situation becomes so dire that it is forced to seek reunification with the United Kingdom.

Click here or on the cover image to download the full PDF report.

For more information about Wikistrat and for access to the full simulation archive, contact info@wikistrat.com.

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New Wikistrat Simulation: Ebola: A Global Health Challenge


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An outbreak of the Ebola virus in West Africa has given rise to fears of a pandemic. But despite the panic, there might be opportunities as well. The outbreak could be a wake-up call for the region and accelerate the expansion of private health care infrastructure there.

Ebola spread globe

This week, Wikistrat launches a new crowdsourced simulation to study the challenge posed by the Ebola virus outbreak to health policy globally. The simulation allows analysts to propose both positive and negative outcomes within comprehensive, competing scenario pathways of the disease’s spread and termination.

Since a major outbreak of the Ebola virus disease was first reported in Guinea in March 2014, an epidemic has spread across West Africa. This already marks the worst Ebola outbreak in recorded history. The disease is no longer contained to the region: A Saudi Arabian man traveling home from Sierra Leone is believed to have died of Ebola in early August. Two American aid workers were infected in Liberia.

While the spread of the epidemic raises the prospect of countries shutting their borders and fending off immigrants, there are arguments against Ebola becoming a true pandemic. The virus is not airborne and cannot survive outside the body for long. Symptoms show relatively quickly and patients typically die before infecting more than one or two others.

Fears of a pandemic nevertheless abound. Saudi Arabia has stopped issuing visas to Muslim pilgrims from West Africa. British Airways this month suspended all flights to and from Liberia and Sierra Leone — while most Western governments have advised their citizens to avoid the region. Civil unrest, the absence of adequate medical services and low trust in both authority and foreign aid workers might yet pose the biggest risk.

WS AnalystsAre you interested in participating in simulations like these? Apply for membership to the analytic community here.

Stay tuned to Wikistrat’s Facebook and Twitter channels for updates and insights from this simulation!

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Ask a Senior Analyst — Miriam L. Campanella


Wikistrat’s Facebook and Twitter followers recently engaged in a 24-hour exclusive Q&A session with one of Wikistrat’s Senior Analysts, Miriam L. Campanella. Questions and Ms. Campanella’s answers are transcribed below.

Miriam Campanella

Miriam L. Campanella is a Jean Monnet Professor at the University of Turin and a ECIPE Senior Fellow. She has published extensively on European monetary and financial institutions, contributing to several edited books and journals. With Sylvester C.W. Eijffiger, she co-authored EU Economic Governance and Globalization (2003). Since then, her research focus has shifted to Asia and the region’s attempts to build up independent monetary and financial facilities.

Omololu T. Hebron: What will be the implications of monetary and financial integration in East Asia on the economies of the developing countries? Will these developing economies benefit more in such a regional bloc in terms of manufacturing and boosting of their domestic economy?

Answer: Your question touches on a major issue in economics, as it relates to monetary integration, a proxy of a fixed exchange rate via an anchor-basket or a major currency (or a synthetic currency, as the European Currency Unit in the European Monetary System) that delivers trade-promoting gains for the parties involved.

European Union (EU) members with the bilateral Exchange Rate Mechanism (ERM) in 1980, and European Monetary Union (EMU) in the 1990s, took almost three decades to stabilize exchange rates and finally establish a single currency. This coordination exercise helped indeed to adjust EU economies to meet in some way the parameters of an optimum currency area, conditional to the success of a single currency. According to economists of different quarters, this way is barred to East Asian countries as the U.S. dollar plays a pivotal role in the area.

Given that the Europeans took three decades to work out a regional exchange rate diplomacy, and to adopt the euro, East Asia, in the wake of 2008-2009 financial crisis, started moving in a surprising way. The collapse of trade financing during the crisis, which contributed to a 20 percent drop in China’s exports, made Chinese authorities aware of the intrinsic instability of the existing monetary regime which is based on one national currency that performs the role of global reserve currency. In order to bypass the U.S. dollar, the middleman of regional trade, the People’s Bank of China intensified bilateral currency swap agreements signed with other central banks to insure against a repeat of these events.

A second defining moment came with the RMB becoming a reference exchange-rate anchor. When this role intensifies, a currency bloc tends to develop around the reference currency whose monetary policy becomes dominant. Since 2010, the RMB has surpassed the dollar and the euro by becoming the top reference currency in East Asia and the Philippines. The dollar’s dominance as reference currency in East Asia is now limited to Hong Kong (by virtue of the peg), Vietnam and Mongolia. Yet the RMB as the top exchange-rate reference currency is not restricted to East Asia. For Chile, India and South Africa, the RMB is the dominant reference currency. For Israel and Turkey, the RMB is a more important reference currency than the dollar.

These developments are evidence of the relevance of the China’s RMB as an exchange rate stabilizer, a critical factor of trade performance to developing economies. (more…)

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Ask a Senior Analyst — Michael J. Geary


Wikistrat’s Facebook and Twitter followers recently engaged in a 24-hour exclusive Q&A session with one of Wikistrat’s Senior Analysts, Michael J. Geary. Questions and Mr. Geary’s answers are transcribed below.

Michal Geary

Michael J. Geary is an Assistant Professor of Contemporary Europe/European Union at Maastricht University in the Netherlands, a Non-Residential Global Fellow at the Wilson Center in Washington, DC and a Visiting Fellow at the Institute for European Global Studies, University of Basel, Switzerland. He is the author of two books and numerous articles/op-eds about the process of European Union (EU) integration and enlargement, transatlantic relations and British-Irish relations

Mr. Geary has held distinguished fellowships including a Fulbright, Global Europe Fellowship at the Wilson Center and a European Parliament-Bronisław Geremek Research Fellowship at the College of Europe (Warsaw). He holds a PhD from the European University Institute, Florence, Italy.

Shaun Riordan: With the deepening integration of the eurozone, the European Union increasingly seems divided into (at least) three parts: the eurozone, the Eurosceptic North-West and a somewhat abandoned Eastern Europe (also seeing increasing nationalist thinking). How do you see this de facto three speed EU development, what implications does it have for the Treaty of Lisbon (and the European Commission) and how will it impact Britain’s relations with the EU?

Answer: Much depends on how one defines Euroscepticism. It is not necessarily an unhealthy phenomenon. The problem arises when it gets bound up with unhealthy doses of nationalism and right- and left-wing propaganda and the reluctance of mainstream parties to combat the rhetoric. There are differences and divergences between the 28 member states on certain policy fields (foreign policy, agriculture, environment). These have always existed, but managing differences perhaps has become more challenging with each round of accession.

The multi-speed or multi-dimensional nature that you describe is a cause for concern, but I would argue is an inevitable result of the nature of the integration process linked to successive rounds of enlargements. An enlarged EU does not necessarily mean deeper integration with every member state on the same bus and going in the same direction. Each of the 28 is faced with particular national challenges and each has a different relationship with, and approach to, European integration and its direction. Differences have existed since day one whether these are related to policies or visions. The euro and Schengen Area are examples of the multi-speed nature of the EU’s policy framework.

Britain (like other countries) has been able to negotiate op-outs and most likely will continue to exercise this option into the future. London seems to have greater issue with decisions emanating from the Council of Europe than with decisions from the EU’s legal watchdogs. I do not think this continued piecemeal integration greatly affects British-EU relations. Part of the problem for London will be to convince the other 27 capitals (and the EU institutions) to agree to the package of changes (still undefined) likely to be sought after next year’s British general election (should the Conservatives return to government).

There seems to be very little appetite in wanting to accommodate London’s demands (unlike in the mid-1970s, but the Community only had nine members then). Attempts to forge deeper links between eurozone countries through wider treaty changes (a new EU treaty) would allow Britain the opportunity to seek a grand bargain mirrored on what David Cameron mentioned in his January 2013 speech on the subject. Much will depend on the generosity of his EU counterparts and their interest (or lack thereof) in keeping Britain inside the EU. The integration process will continue with Britain maintaining semi-insider status. Much more interesting is whether Britain withdraws from the Council of Europe and the impact that this might have on its relations with the EU. (more…)

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